B-146378, SEP. 5, 1961

B-146378: Sep 5, 1961

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED JULY 10. TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT DA-18-108-405-CML-1050 WAS BASED. INVITATIONS WERE SENT TO 25 PROSPECTIVE SOURCES. IN RESPONSE THERETO 8 BIDS WERE RECEIVED. INCLUDING THAT OF CLAIMANT WHO SUBMITTED 3 PRICES AS FOLLOWS: TABLE DOMESTIC ALUMINUM $4.2775 EACH SHEET CANADIAN ALUMINUM 4.1575 EACH SHEET FOREIGN ALUMINUM 3.9175 EACH SHEET THE NEXT LOW BID WAS $4.51. WAS REJECTED PURSUANT TO ASPR 6-104.4 (B). WAS ACCEPTED PURSUANT TO ASPR 6- 103.5 (B) ON APRIL 20. NOTICE OF AWARD WAS RECEIVED BY THE CONTRACTOR ON APRIL 24. FOR WHICH RELIEF WAS REQUESTED. ON THE SAME DATE THE CONTRACTOR WAS ADVISED THAT THE CONTRACTING OFFICER DID NOT HAVE AUTHORITY TO GRANT RELIEF.

B-146378, SEP. 5, 1961

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JULY 10, 1961, WITH ENCLOSURES, FROM THE CHIEF, CONTRACTS DIVISION, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING A DECISION RELATIVE TO A MISTAKE ALLEGED BY CHARLES MUNDT AND SONS, JERSEY CITY, NEW JERSEY, TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT DA-18-108-405-CML-1050 WAS BASED.

BY INVITATION NO. CML-18-108-61-160 ISSUED MARCH 21, 1961, AND AMENDMENT NO. 1 ISSUED MARCH 30, 1961, U.S. ARMY CHEMICAL CENTER PROCUREMENT AGENCY, ARMY CHEMICAL CENTER, MARYLAND, SOLICITED BIDS--- OPENING DATE APRIL 12, 1961--- FOR FURNISHING A QUANTITY OF 9,107 ALUMINUM SHEETS, DESCRIBED IN THE INVITATION AS FOLLOWS:

"ALUMINUM, SHEET, ALLOY 5052-H34, PERFORATED, TYPE II, CLASS B, IN ACCORDANCE WITH SPECIFICATION MIL-S-12875, AMENDMENT NO. 1 DATED 30 JUNE 1958, .063 IN. BY 41-9/32 BY 22-9/32 IN ACCORDANCE WITH CHEMICAL CORPS DRAWING C5-19-1372 DATED 15 MAY 1959.'

INVITATIONS WERE SENT TO 25 PROSPECTIVE SOURCES. IN RESPONSE THERETO 8 BIDS WERE RECEIVED, INCLUDING THAT OF CLAIMANT WHO SUBMITTED 3 PRICES AS FOLLOWS:

TABLE

DOMESTIC ALUMINUM $4.2775 EACH SHEET

CANADIAN ALUMINUM 4.1575 EACH SHEET

FOREIGN ALUMINUM 3.9175 EACH SHEET

THE NEXT LOW BID WAS $4.51, WITH OTHER BIDS BEING $4.73, $4.85, $5.53, $5.81, $7.45, AND A HIGH BID OF $5.495 WITH A TOOLING CHARGE OF $4,295 ADDED.

THE RECORD SHOWS THAT BECAUSE OF THE IMPORTANCE OF THIS PROCUREMENT AND IN CONSIDERATION OF THE LIMITED TIME FOR SUBMISSION OF THE BIDS, THE CONTRACTING OFFICER BY TWX DATED APRIL 17, 1961, REQUESTED CHARLES MUNDT AND SONS, THE LOW BIDDER, TO VERIFY ITS UNIT BID PRICES QUOTED ON A QUANTITY OF 9,107 PERFORATED ALUMINUM SHEETS PURSUANT TO THE SUBJECT INVITATION. IN REPLY, BOTH BY TELEGRAM AND BY LETTER DATED APRIL 18, 1961, CLAIMANT VERIFIED AND CONFIRMED ITS BID AS ORIGINALLY SUBMITTED. THE MUNDT BID OF $3.9175, BASED ON FURNISHING FOREIGN ALUMINUM, WAS REJECTED PURSUANT TO ASPR 6-104.4 (B). THE FIRM'S LOW BID OF $4.1575, BASED ON FURNISHING CANADIAN ALUMINUM, WAS ACCEPTED PURSUANT TO ASPR 6- 103.5 (B) ON APRIL 20, 1961, AT A TOTAL CONTRACT PRICE OF $37,862.35, AND NOTICE OF AWARD WAS RECEIVED BY THE CONTRACTOR ON APRIL 24, 1961.

BY TELEPHONE, ON APRIL 28, 1961--- CONFIRMED BY TELEGRAM OF THE SAME DATE --- CHARLES MUNDT AND SONS ADVISED THE PURCHASING AGENCY OF A MISTAKE IN ITS BID, EXPLAINING THAT IT HAD NOT INCLUDED PROTECTIVE FINISH EXPENSES IN COMPUTING THE BID AND THAT SUCH PROTECTIVE FINISH, AS REQUIRED BY THE BID INVITATION AND THE CONTRACT, WOULD COST $1.20 PER SHEET OR A TOTAL OF $10,928.40, FOR WHICH RELIEF WAS REQUESTED. ON THE SAME DATE THE CONTRACTOR WAS ADVISED THAT THE CONTRACTING OFFICER DID NOT HAVE AUTHORITY TO GRANT RELIEF, AND IT WAS SUGGESTED THAT THE FIRM SUBMIT IN WRITING A REQUEST FOR RELIEF, TOGETHER WITH PERTINENT DOCUMENTS IN SUPPORT OF THE CLAIM, EXPLAINING IN DETAIL HOW THE ERROR OCCURRED AND WHAT ITS INTENDED BID PRICE WAS, UPON RECEIPT OF WHICH THE CLAIM WOULD BE FORWARDED TO HIGHER AUTHORITY. IN LETTERS DATED MAY 2 AND 9, 1961, MUNDT AND SONS STATED THAT IT HAD NEGLIGENTLY OMITTED THE FINISHING COSTS FROM ITS BID, REQUESTED RELIEF IN THE AMOUNT OF $1 PER SHEET AND A TOTAL OF $9,107, RATHER THAN $1.20 A SHEET AND A TOTAL OF $10,928.40, AS PREVIOUSLY CLAIMED, AND FORWARDED DOCUMENTS IN SUPPORT OF ITS CLAIM.

THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED THE BIDDER MUST BEAR THE CONSEQUENCES OF THE ERROR UNLESS THE ERROR WAS MUTUAL OR THE OFFICER ACCEPTING THE BID WAS ON NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF SUCH CIRCUMSTANCES AS WOULD MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH. 39 COMP. GEN. 36.

THE BID OF CHARLES MUNDT AND SONS WAS REGULAR ON ITS FACE, AND ITS BID PRICE WAS NOT OUT OF LINE WITH THE OTHER BIDS RECEIVED. THE CONTRACTING OFFICER HAS STATED THAT HE REQUESTED THE FIRM TO VERIFY ITS BID, PRIOR TO ACCEPTANCE THEREOF, ONLY BECAUSE OF THE IMPORTANCE OF THE PROCUREMENT AND NOT BECAUSE OF SUSPECTED ERROR. THE CONTRACTOR DID NOT ALLEGE ERROR IN ITS BID UNTIL AFTER ACCEPTANCE OF THE BID AND AWARD OF THE CONTRACT. DOES NOT APPEAR THAT THE CONTRACTING OFFICER HAD ANY REASON TO SUSPECT ERROR IN CLAIMANT'S BID OR THAT HE HAD ANY INFORMATION TO PUT HIM ON NOTICE OF PROBABILITY OF ERROR. THEREFORE, IT MUST BE CONCLUDED THAT THE CONTRACTING OFFICER'S ACCEPTANCE OF THE BID OF CHARLES MUNDT AND SONS, WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF ANY ERROR THEREIN, WAS IN GOOD FAITH AND RESULTED IN A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

ACCORDINGLY, AND SINCE IT DOES NOT APPEAR UNCONSCIONABLE TO REQUIRE THE CONTRACTOR TO FURNISH THE MATERIAL AT ITS VERIFIED BID PRICE, WE FIND NO PROPER BASIS FOR GRANTING ANY RELIEF TO CHARLES MUNDT AND SONS UNDER CONTRACT NO. DA-18-108-405-CML-1050.